Nonprofit Accounting Question:
Download Questions PDF

Define the word credit mean in terms of accounting?

Answer:

The word "credit" is part of the equation of double entry bookkeeping.
In order for bookkeeping entries to balance, there must always be a debit (left side, abbreviated by "dr") and credit (right side, abbreviated by "cr") entry that equal one another.

For example, to record an Office Supply Store purchase (on account ~ a payable), the entry would be:
Office Supplies Exp $500.00(dr)
Accounts Payable $500.00(cr)

If an entry does not balance the totals for debits and credits, your books will be out of balance.

Download Nonprofit Accounting Interview Questions And Answers PDF

Previous QuestionNext Question
Described the disadvantages of back-flush accounting?Are assets a permanent account?